20 June 2001
Asset Management Strategy Development
Report by: Capital Advisory Group
Ward Implications: All
This report sets out the current position of the Council in the asset
management process and recommends action required to both support
the development of that process and to comply with the Government’s
requirement to publish a Capital Strategy and Asset Management Plan by
31 July 2001.
Cabinet is recommended to:
1. Note the developments set out in the report;
2. Endorse the roles and responsibilities as defined in section 4 of the
3. Authorise the Head of Property Services to develop a strategy and
timetable to address the key issues set out in section 6 of the report;
4. Approve the provision of funding for the ongoing work of asset
management planning, as set out in section 7 of the report; and
5. Authorise the Director of Enterprise, Environment and Culture, the
Director of Strategic Support and the Director of Cityworks to develop
a formal Capital Strategy and Asset Management Plan for the Council
by drawing together and building on the current processes.
The draft Capital Strategy and Asset Management Plan to be
presented to the next meeting of Cabinet.
3. Introduction and Context
3.1 There are a number of ongoing initiatives that are raising the profile of the
strategic management of property assets in local government:
• Central government's proposals for a single capital pot, distributed
on the basis of need and performance - guidelines issued by DETR
require the production of a capital strategy (CS) and asset
management plan (AMP).
• DfEE requirements for a schools capital strategy and asset
management plan for the schools estate.
• DETR requirements for the establishment of a new financial
framework for local authority housing from April 2001.
• Publication of the Audit Commission's report entitled "Hot Property:
Getting the Best from Local Authority Assets" - recommends that
authorities challenge the need to retain property, search for
innovative ways of providing services, and ensure that strategic
property matters receive regular scrutiny from the management
board and elected Members.
• The best value requirements of Part I of the Local Government Act
1999 - require that a rigorous approach is adopted towards asset
management in terms of stakeholder involvement; demonstrating
economy, efficiency and effectiveness; examination of objectives
and delivery mechanisms; and measurement of performance.
3.2 Capital Strategy
The Council is required to publish a Capital Strategy by July 2001, a “dry
run” document having been produced in July 2000. The Capital Strategy
will represent a high level summary of the Council’s approach to capital
investment, highlighting key priorities and targets, explaining the approach
to prioritising investment, and explaining how the Council will monitor and
Asset Management Plan
The Asset Management Plan itself, also required by July 2001 with a “dry
run” version produced in November 2000, will set out a strategic and
managed approach to the development and enhancement of the
performance of property assets to improve service delivery. The Plan will
provide information on the following areas:
1. corporate action and the role of the Corporate Property Officer;
2. processes for consultation;
3. data management;
4. system for performance monitoring and measurement;
5. programme development (processes being/to be adopted);
6. treatment of under-used and surplus assets; and
7. spending and outputs (capital programme, resources, capital
receipts projections, etc.).
3.3 Government Office for the North East has assessed the “dry-run”
documents submitted last year, and provided the following overall
“A clear understanding has been demonstrated on most of the issues that
the Capital Strategy involves and the systems that are required. There is
clearly some way to go in achieving the Council’s objectives but this is a
good start. The major noticeable weakness to be addressed is the
apparent lack of community/stakeholder involvement in determining
Asset Management Plan
“The City Council has a vast array of fixed assets, as identified in the
AMP. Developing robust asset management systems and procedures will
be essential if they are to be managed corporately. The Council shows a
good understanding of what needs to be done. An asset management
development plan has been agreed and a timetable is in place to address
some aspects of the asset management process during 2001. We look
forward to seeing how these have been incorporated into the Council’s
AMP and Capital Strategy in July 2001.”
The feedback will provide a baseline for future assessment and enable the
Council to make appropriate improvements in the strategy documents to
be submitted in July 2001.
4. Roles and Responsibilities
4.1 The DETR guidance recommends that the Council has in place a
designated individual and team with authority to develop the corporate
asset management process.
4.2 Corporate Property Officer
In response to DETR and Audit Commission recommendations, Corporate
Team has nominated the Head of Property Services as Corporate
Property Officer (CPO), although a precise role has not been defined.
For purposes of clarification, it is suggested that the CPO, reporting to the
Capital Advisory Group, should be given specific responsibility for the
• writing and facilitating the implementation of the Asset Management
• identifying the property requirements of service departments in line
with corporate requirements, following consultation with
• developing a corporate database system for all land and property
• developing and implementing a performance management system
for property assets;
• overseeing a programme of condition surveys of Council properties;
• providing expertise and advice on asset management issues.
4.3 Capital Advisory Group
The role and representation of the Capital Advisory Group are being
reviewed. The intention is to re-establish a strategic forum to guide the
Council’s approach towards capital investment strategy and asset
management in the widest terms.
With an appropriate cross-Directorate membership of senior officers, the
group will oversee the development and implementation of the Capital and
Asset Management strategies, and will provide a means to ensure that all
issues relating to capital investment and asset management are debated
and managed in one forum.
In relation to property asset management, the Group is to be given
specific responsibility for the following:
• establishing and assessing the detailed work programme for the
Asset Management Plan and Capital Strategy (including the
property review programme, acquisition and disposal programmes,
opportunities for cross-service working, condition surveys, etc.);
• developing and monitoring the capital programme as a whole,
including making recommendations for the prioritisation of schemes,
determining the use of available resources and effective project
• agreeing the objectives for the commercial property portfolio, setting
criteria for the performance of existing assets and assessing
potential for acquisitions/investment; and
• considering strategic issues in connection with capital procurement
(e.g. partnership working, PFI, best value).
4.4 Asset Management Working Group
The role and representation of the existing Asset Management Team are
being reviewed. The intention is to establish a forum where
representatives from service departments co-ordinate the delivery of the
detailed work programme as established by CAG.
Membership of the Group will include:
• technical support staff covering property and financial disciplines
(Property Services, Strategic Support and City Design);
• service property managers (e.g. Social Services, Education); and
• representatives covering corporate initiatives (e.g. Going for Growth,
Customer Service Development Team, Policy Unit)
The Working Group, reporting to Capital Advisory Group, is to be given
specific responsibility for the following:
• ensuring that service plans identify how short, medium and long
term requirements will impact on the property portfolio (including
changes in government legislation/regulations, budgetary
• co-ordinating the property review programme, including condition
surveys and suitability assessments;
• identifying surplus property and considering alternative
• identifying cross-service opportunities where departments and/or
external organisations can share accommodation;
• reviewing data management arrangements; and
• examining innovative options for service provision (e.g. hot desking,
partnership arrangements, etc.).
4.5 Member Involvement
A report was submitted to Development & Transport Select Committee –
Property Portfolio Sub-Group in March 2001, outlining asset management
The Sub-Group noted that there was a need to identify Cabinet/Member
responsibility for strategic asset management, and indicated that there is a
strong feeling that elected members should be involved as far as possible.
It is recommended that:
•Asset management should be identified as a cabinet-level issue, and
designated to the portfolio of the Cabinet member responsible for
Development and Transport;
•Area Committees should be used as a forum for consultation, where
appropriate (e.g. around such issues as the development of customer
service centres); and
•Periodic reports to members on progress, key issues, performance
management, etc. should be submitted to Cabinet by the Corporate
Property Officer, via Capital Advisory Group.
5. Current Initiatives
5.1 There are a number of ongoing reviews and initiatives which may have an
impact on the nature, function and location of the Council’s property
assets, and which accord with the principals of good asset management.
5.2 Customer Service Strategy
Under the umbrella of the Customer Service Strategy, area offices and
other local facilities are currently being reviewed/established with a view to
rationalising buildings through a partnership working group from
Cityworks, Community & Housing and Social Services.
The scale and complexity of the asset management issues inherent in the
Customer Service Strategy over the next five years may impact on other
classes of asset, far beyond the initial consideration of existing customer
service outlets. In the short term, each Area Committee has already been
consulted on the criteria by which the location of primary Customer
Service Centres will be determined.
5.3 Commercial Portfolio Review & Housing Shops Strategy
Work has commenced on a review of the Council’s commercial property
portfolio, aimed at challenging the need to retain holdings, and disposing
of any that do not support corporate priorities or that cannot demonstrate
an adequate return on investment.
The Head of Finance should make explicit the financial parameters
required in relation to the commercial estate.
A separate review has also commenced in respect of the housing shops
portfolio. Whilst the financial return from these holdings needs to be
considered, this portfolio does have wider social objectives, and a link
needs to be established with the Customer Service Strategy.
5.4 Going for Growth
Going for Growth represents a radical citywide regeneration initiative that
will have a significant impact on the City’s capital and asset management
The revised draft East and West regeneration plans are to be released in
June 2001, and are to be the subject of further public consultation. In
addition, the process of selecting a development partner has commenced.
5.5 Community Buildings
Community centres and other facilities operated by the Leisure Services
Division of Cityworks are currently being reviewed together with the
centres of the Children and Young People’s Service in Community &
Housing. The same approach to political consultation as for Customer
Service Centres will be employed.
The interim report of the Best Value Review of Libraries in 2000/01
identified that the role and location of the Central Library should be
reviewed, and also that the branch library network should be rationalised.
Preliminary work on the rationalisation exercise has begun.
Libraries represent a core component of the Customer Service Strategy:
those found to be appropriately situated with adequate facilities are likely
to discharge some secondary customer service centre functions at the
very least. Opportunities will be sought to deliver as many Council
services as possible (and appropriate) from the same facility.
5.7 Schools AMP & Housing Business Plan
Education are separately engaged in producing their schools AMP in
accordance with DfEE requirements – the AMP will form the key
operational document for managing the schools estate.
Housing will continue to produce a statement of their housing strategy for
DETR under the HIP process. Operational management of the Council
owned stock will be informed by the HRA Business Plan being developed
in accordance with DETR guidance.
The overarching Capital Strategy and AMP will need to make reference to
these assets to ensure that the property and corporate capital implications
of the assets held are fully considered.
5.8 Condition Surveys
City Design has completed a programme of condition surveys for all public
buildings as well as for the schools estate. An overall review of
operational building assets will have to take into account refurbishment
expenditure and the likely maintenance consequences of any
5.9 Access Audits
City Design will have completed this audit by July 2001. The study will
inform the Council of the accessibility of all facilities that are used by the
public. The study will categorise the City’s assets and the investment
required to bring each facility up to a recognised standard as stipulated by
the Disabilities Discrimination Act.
6. Key Issues
6.1 Whilst noting the work that is currently being undertaken in various areas,
it is important to recognise that in order to fully develop appropriate
processes, decisions and further actions are needed around the following
6.2 Corporate/Business Process
Assets should be regularly considered within relevant planning and
•asset management issues are to be incorporated in the specification
being prepared for the service planning process
•asset management issues are to be considered as part of all relevant
best value reviews, and guidance will be issued to all review teams
•the timetable for asset management planning is to be linked to those
established for other corporate/business processes
6.3 Data Management
A review has taken place of existing data management systems to support
corporate asset management. The review identifies the developments
required to meet AMP requirements. In particular, the need to replace
obsolete and manual systems, and for any developments to incorporate a
Unique Property Reference Number to allow integration of data systems.
A mechanism should be established for consultation with internal
stakeholders and users, particularly to establish views on the suitability of
6.5 Other Agencies
Consideration should be given as to how future partnership arrangements
for service delivery, funding or shared resource provision might impact
upon the performance of the Council’s asset base.
6.6 Property Management
Existing property management arrangements should be reviewed – is the
existing arrangement of devolving day to day management to service
departments the most appropriate in terms of corporate asset
6.7 Office Accommodation Review
A review of office accommodation should be initiated to examine running
costs and how well space is being utilised, and to consider opportunities
for innovative working practices (e.g. space planning, hot desking,
6.8 Performance Measurement
The DETR has recently issued revised guidance for the development of
performance indicators to assist in providing standard information on
asset management. The intention is to show year on year improvement
within authorities and to allow benchmarking across authorities and the
The DETR indicators should be adopted together with any other local
indicators deemed appropriate.
7.1 Funding has been made available for condition and disabled access
surveys for 2000/01, and an allocation for AMP preparation was approved
by Cabinet in July 2000.
It should be recognised that there is a need to establish an appropriate
level of future funding for the ongoing work of asset management
planning. Estimates have been prepared for the next two years, as
Disabled Access survey (one-off) £55k -
Return in detail Disabled Access Survey - £62k
Update/upgrade increase scope of building £270k £270k
data (20% PA)
Property Services – ongoing support of AMP £100k £100k
planning & process
Strategic Support – financial support of the £20k £20k
Provision for data systems development £50k £10k
7.2 Funding remaining from within the Corporate Resource Pool for 2000/01
totals £94k – this leaves a funding requirement of £401k in 2001/02 and
£462k in 2002/03.
It is estimated that £70k of the asset management work relates to school
premises and therefore will be funded from within the Education and
Libraries budget. It is recommended that the balance should be found
from within the Corporate Resource Pool and money already identified for
the Disabled Access Officer.
This budget will be monitored as part of the ongoing work of the Asset
Management Working Group.
8. Views of the Head of Finance
8.1 The Head of Finance has been consulted. There are no other financial
implications other than those identified in section 7 above.
9. Views of the Head of Legal Services
9.1 The Head of Legal Services has been consulted. There are no legal
10. Next Steps
10.1 The following action is now required:
• Draft the Capital Strategy and AMP documents required for
submission to Government Office – the documents to be presented to
the next meeting of Cabinet;
• Put in place the arrangements for the Corporate Property Officer,
Capital Advisory Group, Asset Management Working Group and
Member involvement, as set out in section 4 of this report; and
• Establish a strategy and timetable to address the key issues set out in
section 6 of this report.
Contact Person – David Pringle Ext. 25524